NY investigates out-of-network health care costs

A New York state investigation has found patients are being hit with unexpected, out-of-network bills, including many from specialists who assist doctors within networks.

Gov. Andrew Cuomo Wednesday announced that the Department of Financial Services is investigating the problem regarding hidden, or at least undisclosed, out-of-network costs. The department also issued a report calling for greater transparency from insurers and providers and more consumer protection.

The state said the investigation was “sparked by an overwhelming amount of consumer complaints,” which led to a report outlining numerous cases in which patients who went to in-network providers were hit with thousands of dollars in out-of-network costs.

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“Too many people are being hit with medical bills that are too high when they thought their care was covered by their insurance,” Cuomo said. “We can’t allow that to continue.”

Cuomo said the state needs to work with insurers and medical service providers to “ensure that all New Yorkers fully understand and are aware of the terms of their health care contracts.”

“Our report shows that all too often people who try their hardest to stay in network still get stuck with the most unwelcome surprise – a big out-of-network bill,” Financial Services Superintendent Benjamin M. Lawsky said. “We need to reform our system now to protect middle-class New Yorkers who can least afford these additional burdensome costs.”

The average emergency out-of-network bill investigators found was $7,006, 14 times what Medicare would pay. The average out-of-network radiology charge was 33 times Medicare’s rate. One neurosurgeon charged $159,000 for an emergency procedure that only costs Medicare $8,500.

“This is a widespread problem that particularly plagues cancer patients,” said Sherry Tomasky, advocacy director for the American Cancer Association. “New Yorkers who are dealing with the stress and anxiety of being treated for cancer should not have added burden of thinking about unexpected exorbitant costs that they cannot afford.”

Investigators found a case where open-heart surgery on a child led to out-of-network payments because an assistant surgeon who wasn’t in the network took part. The family was forced to pay $5,000 of that doctor’s $6,400 bill, according to the department. Another case involved a patient who was sent an unexpected $1,300 bill for what turned out to be an out-of-network anesthesiologist.

The department is calling for providers in non-emergency situations to disclose whether or not all services are in-network, what out-of-network charges will be and how much insurers will cover.

It’s also calling for insurers to more carefully disclose how they calculate the cost of out-of-network services they will cover. And the agency favors prohibiting excessive out-of-network fees for emergency services, which the report cites as a particular problem.